Sittings · Document

DRAFT OPINION (COM(2023)0161 – C90062/2023 – 2023/0081(COD)) 2023-06-06

On the proposal for a regulation of the European Parliament and of the Council on establishing a framework of measures for strengthening Europe’s net-zero technology products manufacturing ecosystem (Net Zero Industry Act)

Committee on Economic and Monetary Affairs · Rapporteur: Luděk Niedermayer

(*) Associated committee – Rule 57 of the Rules of Procedure

AMENDMENT

The Committee on Economic and Monetary Affairs calls on the Committee on Industry, Research and Energy, as the committee responsible, to take the following into account:

Amendment 1

Proposal for a regulation

Recital 2

Text proposed by the Commission	Amendment
(2) The Single Market provides the appropriate environment for enabling access at the necessary scale and pace to the technologies required to achieve the Union’s climate ambition. Given the complexity and the transnational character of net-zero technologies, uncoordinated national measures to ensure access to those technologies would have a high potential of distorting competition and fragmenting the Single market. Therefore, to safeguard the functioning of the Single market it is necessary to create a common Union legal framework to collectively address this central challenge by increasing the Union’s resilience and security of supply in the field of net-zero technologies.	(2) The Single Market provides the appropriate environment for enabling access at the necessary scale and pace to the technologies required to achieve the Union’s climate ambition. Given the complexity and the transnational character of net-zero technologies, uncoordinated national measures to ensure access to those technologies would have a high potential of distorting competition and fragmenting the Single market. Therefore, to safeguard the functioning of the Single market it is necessary to create a common Union legal framework to collectively address this central challenge by increasing the Union’s resilience and security of supply in the field of net-zero technologies.
	Such a framework should not lead to a fragmentation of the internal market, for example, in cases where relaxation of State aid policy would be such that only some Member States could, in practice, use the limits due to limitations of the fiscal space in certain Member States.

Or. en

Amendment 2

Proposal for a regulation

Recital 2 a (new)

Text proposed by the Commission	Amendment
	(2 a) Public funds should not be the only way of promoting investments. Ways to mobilise private investments should be prioritised, as economically, it is the most beneficial way to achieve the EU climate ambitions. Replacement of subsidies or other similar means of support by financial tools (including risk reduction measures) can contribute to the fiscally more effective involvement of public resources. Independence from public financing will ultimately lead to greater competitiveness of the respective undertaking.

Or. en

Amendment 3

Proposal for a regulation

Recital 34 a (new)

Text proposed by the Commission	Amendment
	(34 a) The extensive use of State aid can go against the efficiency of the Single Market, and in some cases trigger a global subsidy race. Lessons should be learnt from the COVID-19 and energy crises, where the temporary State aid tools were introduced, and the State aid rules were relaxed and sometimes the resulting policies were of low fiscal effectiveness. In the case of the energy crisis, often, instead of well-targeted and effective aid, broad measures that are fiscally very expensive and contribute to the growth of inflation were introduced.

Or. en

Amendment 4

Proposal for a regulation

Recital 34 b (new)

Text proposed by the Commission	Amendment
	(34 b) The EU is in a global race to attract new, clean industry investments and the comparison between different policies adopted by other actors is important. While the EU has clearer and more transparent rules, as well as a decarbonisation trajectory, in this proposal, the EU relies mainly on investment incentives provided by relaxed rules for State aid for new or extended investments. The same is part of the measures taken in the US, particularly the Inflation Reduction Act. Incentives are provided through tax relief and are complemented by strong components addressing both the production supply side (support for hydrogen) and the demand side (electric vehicles federal subsidy). It is possible that such a measure, that is not included in the Commission’s proposal for an EU policy, will be, for some businesses, a more straightforward way to encourage their investments.

Or. en

Amendment 5

Proposal for a regulation

Recital 34 c (new)

Text proposed by the Commission	Amendment
	(34 c) While predictable rules, goals, and regulations provide a good environment for investment decisions of firms needed to reach decarbonisation goals, not enough attention is paid to the business case (a justification of a proposed investment based on the expected economic benefit) consideration. While the proposed Regulation aims for promoting investments through the simplification of permitting and the possibility of more extensive State aid, this could be insufficient in case there is not enough demand or the business case does not support investment decisions. This could lead to a situation where the goals of climate neutrality via access to net-zero technologies will not be reached. A permanent monitoring of the business case for essential investments in the EU can serve as one of the key indicators, of whether the EU policy is sufficient to trigger the desired level of economic activity or investments.

Or. en

Amendment 6

Proposal for a regulation

Recital 34 d (new)

Text proposed by the Commission	Amendment
	(34 d) As taxation falls under the competence of the Member States, the possibility of providing an EU-wide tax break for investment (similar to the measures taken in the US) is de facto excluded. This results in a reduced efficiency of this proposal. The EU budget is used to finance individual policies or investments in each Member State, rather than for the EU-wide policies like support for the production or demand of certain products across the EU. This risks to reduce the efficiency of measures that can be adopted at the EU level and may lead to an over-reliance on individual state policies or relaxation of State aid rules that can, in some cases, undermine the Single Market.

Or. en

Amendment 7

Proposal for a regulation

Recital 35

Text proposed by the Commission	Amendment
(35) Households and final consumers are an essential part of the Union’s demand for net-zero technologies final products and public support schemes to incentivize the purchase of such product by households, in particular for vulnerable low- and lower middle-class income households and consumers, are important tools to accelerate the green transition. Under the solar rooftop initiative announced in the EU solar strategy52 , Member States should for instance set-up national programmes to support the massive deployment of rooftop solar energy. In the REPowerEU plan, the Commission called Member States to make full use of supporting measures which encourage switching to heat pumps. Such support schemes set up nationally by Member States or locally by local or regional authorities should also contribute to improving the sustainability and resilience of the EU net-zero technologies. Public authorities should for instance provide higher financial compensation to beneficiaries for the purchase of net-zero technology final products that will make a higher contribution to resilience in the Union. Public authorities should ensure that their schemes are open, transparent and non-discriminatory, so that they contribute to increase demand for net-zero technology products in the Union. Public authorities should also limit the additional financial compensation for such products so as not to slow down the deployment of the net-zero technologies in the Union. To increase the efficiency of such schemes Member States should ensure that information is easily accessible both for consumers and for net-zero technology manufacturers on a free website. The use by public authorities of the sustainability and resilience contribution in schemes targeted at consumers or households should be without prejudice to State aid rules and to WTO rules on Subsidies.	(35) Households and final consumers are an essential part of the Union’s demand for net-zero technologies final products and public support schemes to incentivize the purchase of such product by households, in particular for vulnerable low- and lower middle-class income households and consumers, are important tools to accelerate the green transition. Under the solar rooftop initiative announced in the EU solar strategy52 , Member States should for instance set-up national programmes to support the massive deployment of rooftop solar energy. In the REPowerEU plan, the Commission called Member States to make full use of supporting measures which encourage switching to heat pumps. Such support schemes set up nationally by Member States or locally by local or regional authorities should also contribute to improving the sustainability and resilience of the EU net-zero technologies. Public authorities should for instance provide higher financial compensation to beneficiaries for the purchase of net-zero technology final products that will make a higher contribution to resilience in the Union. Public authorities should ensure that their schemes are open, transparent and non-discriminatory, so that they contribute to increase demand for net-zero technology products in the Union. The use of subsidies or equivalent should not be limited to, but shall also include financial tools such as subsidies for long-term financing, credit risk limitation instruments, and other similar instruments. Public authorities should also limit the additional financial compensation for such products so as not to slow down the deployment of the net-zero technologies in the Union. To increase the efficiency of such schemes Member States should ensure that information is easily accessible both for consumers and for net-zero technology manufacturers on a free website. The use by public authorities of the sustainability and resilience contribution in schemes targeted at consumers or households should be without prejudice to State aid rules and to WTO rules on Subsidies.
__________________	__________________
52 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions : EU Solar Energy Strategy, COM(2022) 221 final, 18.05.2022.	52 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions : EU Solar Energy Strategy, COM(2022) 221 final, 18.05.2022.

Or. en

Amendment 8

Proposal for a regulation

Recital 41

Text proposed by the Commission	Amendment
(41) Where private investment alone is not sufficient, the effective roll-out of net-zero manufacturing projects may require public support in the form of State aid. Such aid must have an incentive effect and be necessary, appropriate and proportionate. The existing State aid guidelines that have recently undergone an in-depth revision in line with the twin transition objectives provide ample possibilities to support investments for projects in the scope of this Regulation subject to certain conditions. Member States can have an important role in easing access to finance for net-zero technologies manufacturing projects by addressing market failures through targeted State aid support. The Temporary Crisis and Transition Framework (TCTF) adopted on 9 March 2023 aims at ensuring a level playing field within the internal market, targeted to those sectors where a third-country delocalisation risk has been identified, and proportionate in terms of aid amounts. It would enable Member States to put in place measures to support new investments in production facilities in defined, strategic net-zero sectors, including via tax benefits. The permitted aid amount can be modulated with higher aid intensities and aid amount ceilings if the investment is located in assisted areas, in order to contribute to the goal of convergence between Member States and regions. Appropriate conditions are required to verify the concrete risks of diversion of the investment outside the European Economic Area (EEA) and that there is no risk of relocation within the EEA. To mobilise national resources for that purpose, Member States may use a share of the ETS revenues that Member States have to allocate for climate-related purposes.	(41) Where private investment alone is not sufficient, the effective roll-out of net-zero manufacturing projects may require public support in the form of State aid. Such aid must have an incentive effect and be necessary, appropriate and proportionate. The existing State aid guidelines that have recently undergone an in-depth revision in line with the twin transition objectives provide ample possibilities to support investments for projects in the scope of this Regulation subject to certain conditions. Member States can have an important role in easing access to finance for net-zero technologies manufacturing projects by addressing market failures through targeted State aid support. The Temporary Crisis and Transition Framework (TCTF) adopted on 9 March 2023 aims at ensuring a level playing field within the internal market, targeted to those sectors where a third-country delocalisation risk has been identified, and proportionate in terms of aid amounts.
	The general principles outlined in the EU competition rules must be especially taken into account when considering that the relaxation of State aid rules is temporary and therefore, the possibility to obtain higher support is limited in time, as it may have an even more significant impact on the level-playing field. Such crisis driven State aid framework amendment should in fact be temporary.
	With the aim to drive private sector investment into the net-zero transition, Member States should also identify efficient tax policies and eventually reform the tax framework, so that it would contribute to EU climate goals. It is, therefore, necessary for the Member States to resume negotiations of the Commission’s proposals of 14 July 2021 revising the Energy Tax Directive after the presentation of an overall impact assessment and also the proposal of 11 May 2022 addressing the debt-equity bias, as they can contribute to necessary new investments.
	It would enable Member States to put in place measures to support new investments in production facilities in defined, strategic net-zero sectors, including via tax benefits. The permitted aid amount can be modulated with higher aid intensities and aid amount ceilings if the investment is located in assisted areas, in order to contribute to the goal of convergence between Member States and regions. Appropriate conditions are required to verify the concrete risks of diversion of the investment outside the European Economic Area (EEA) and that there is no risk of relocation within the EEA. To mobilise national resources for that purpose, Member States may use a share of the ETS revenues that Member States have to allocate for climate-related purposes.

Or. en

Amendment 9

Proposal for a regulation

Recital 48 a (new)

Text proposed by the Commission	Amendment
	(48 a) In support of the Commission’s assistance to Member States in the area of administrative and reporting obligations, the Commission shall present an impact assessment of existing relevant legislation (Non-Financial Reporting Directive (NFRD), Corporate Sustainability Reporting Directive (CSRD), Taxonomy Framework) evaluating the results of net-zero projects in the Union. This should be done in order to identify excessive regulatory burden, to propose amendments to the legislation, if deemed necessary, and to establish a single reporting instrument to improve the competiveness of European net-zero technologies.

Or. en

Amendment 10

Proposal for a regulation

Article 14 – paragraph 2 – point b a (new)

Text proposed by the Commission	Amendment
	(b a) assistance to ensure compliance with existing competition rules.

Or. en

Amendment 11

Proposal for a regulation

Article 15 – paragraph 1

Text proposed by the Commission	Amendment
1. The Net-Zero Europe Platform as established in Article 28 shall discuss financial needs and bottlenecks of net-zero strategic projects, potential best practices, in particular to develop EU cross-border supply chains, notably based on regular exchanges with the relevant industrial alliances.	1. The Net-Zero Europe Platform as established in Article 28 shall discuss business cases, by means of financing compared to financial needs and bottlenecks of net-zero strategic projects, potential best practices, in particular to develop EU cross-border supply chains, notably based on regular exchanges with the relevant industrial alliances.
	A summary of generalised findings shall be prepared on a regular basis by the Platform and made available to provide information to possible promoters and to the general public.

Or. en

Amendment 12

Proposal for a regulation

Article 15 – paragraph 2 a (new)

Text proposed by the Commission	Amendment
	2 a. The above elements are to be considered and prioritised in the order listed.

Or. en

Amendment 13

Proposal for a regulation

Article 15 – paragraph 2 b (new)

Text proposed by the Commission	Amendment
	2 b. The use of subsidies or equivalent tools shall not be limited to but also include financial tools such as subsidies for long-term financing, credit risk limitation instruments, and other similar instruments.

Or. en

Amendment 14

Proposal for a regulation

Article 15 – paragraph 2 c (new)

Text proposed by the Commission	Amendment
	2 c. With regard to point c) and d) above, the Commission shall provide guidance on the best and most efficient way to use the programmes listed in order to reach the objectives set out in this Regulation. After 6 months after the entry into force of this Regulation, the Commission shall collect and evaluate data on the projects covered by the scope of this Article and provide guidance.

Or. en

Amendment 15

Proposal for a regulation

Article 20 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission	Amendment
	Non-financial criteria must be used by Member States in a transparent and predictable way.

Or. en

Amendment 16

Proposal for a regulation

Article 21 – paragraph 3

Text proposed by the Commission	Amendment
3. When designing and implementing a scheme falling under paragraph 1, the authority shall base itself on an open, non-discriminatory and transparent process to assess the resilience and sustainability contribution of available products on the market. Any net-zero technology final product shall be entitled to apply to join the scheme at any time. The authority shall specify a pass mark for products to be eligible to the additional financial compensation under the support scheme.	3. When designing and implementing a scheme falling under paragraph 1, the authority shall base itself on an open, non-discriminatory and transparent process to assess the resilience and sustainability contribution of available products on the market. Such schemes shall be used in a predicable way, to provide a stable environment for the parties involved. Any net-zero technology final product shall be entitled to apply to join the scheme at any time. The authority shall specify a pass mark for products to be eligible to the additional financial compensation under the support scheme.

Or. en